Plans for a new rehabilitation centre in the Birmingham area where British troops wounded in Afghanistan and Iraq can be nursed back to heath have taken a step forward.

Defence Secretary Liam Fox said a feasibility study has concluded that the proposed Defence and National Rehabilitation Centre in the Midlands would improve care for injured servicemen and women.

The Duke of Westminster, who funded the study, has now bought a test site at an undisclosed location in the Midlands so the authorities can investigate obtaining planning permission for the project.

The new centre would be near the Queen Elizabeth Hospital in Birmingham, home to the Royal Centre for Defence Medicine, where wounded troops are brought for medical treatment.

If approved by ministers, it would cost about £300 million to build - with funding likely to be provided by the Duke, the Ministry of Defence and service charities the Royal British Legion and Help for Heroes - and open its doors in 2017.

It would replace the current military rehabilitation centre at Headley Court in Surrey.

Dr Fox said in a written ministerial statement: "While the existing defence rehabilitation facility at Headley Court, established in 1947, is widely admired for achieving remarkable results for those injured in conflict, it is important that defence is in a position to benefit to the maximum degree from advances in technology and science.

"Realising the full benefits of such advances will not be possible in the medium to long term because of the physical constraints of the Headley Court site and will therefore require purpose-built accommodation and facilities."

Surgeon General Vice Admiral Philip Raffaelli said: "The potential establishment of a defence and national recovery capability is a very exciting opportunity which will contribute to the improvement of care for our wounded and injured service personnel and to the advancement of rehabilitation medicine in the UK."